How to Manage Fertilizer Costs Against Tight Margins

Sara Bauder, SDSU Extension Agronomy Field Specialist The cost of fertilizers soared to unprecedented levels last year, and that price trend remains intact as we approach the 2022 spring planting season.

It’s a confounding reality for producers as rising input expenses continue to squeeze margins that strong commodity prices would have otherwise supported.

How will you manage costs effectively to maximize profitability this year? One approach is to double down on your understanding of soil fertility and health.

WHAT DO YOUR SOIL TEST RESULTS SAY?

Many producers already regularly take soil samples and work with a lab to analyze them, but this practice—and learning how to interpret the results—can give you greater insight when evaluating input decisions and fertilizer rates. Simply put, you don’t want to overmanage acres when margins are exceedingly tight. “Especially in a year like this when the market for fertilizer is so high and volatile, it’s really important for producers moving into soybeans to make sure they have the right amount of phosphorus (P) and potassium (K) out there for those beans,” said Sara Bauder, SDSU Extension agronomy field specialist. Bauder did note, however, that last year’s drought conditions might skew the nutrient findings in soil samples taken last fall. Running a soil test this spring after the ground has thawed and some additional moisture is present to get more accurate results may not be the worst idea, so long as timing allows. Paying close attention to the recommendations at the end of your soil test report is key. SDSU Extension has published a fertilizer recommendation guide that offers growers fertilizer application rates based on soil test results and yield goals; it has curated a list of nearby soil labs that will provide university recommendations when asked.

“It might be a year to really look hard at what you apply,” said Bauder. “A lot of times the university recommendations are more conservative.”

With that in mind, it might be worthwhile to compare and contrast lab or agronomist recommendations with those from SDSU Extension in an effort to more effectively manage costs.

STRENGTHEN YOUR SOIL MANAGEMENT PRACTICES

The fact of the matter is that we don’t know how long this fertilizer price environment will persist. To ensure you’re doing everything you can to support healthy, fertile soil, now is a good time to evaluate soil management efforts on your operation. Bauder frequently emphasizes the five principles of soil health when talking with growers about management concerns, and the rising cost of inputs has kept that conversation at the forefront.

SDSU Extension can serve as a great resource for producers looking to implement new soil management strategies; your local conservation district can also lend a hand.

“We’re going to look at your whole cropping systems, including this coming year’s crop, and how we can help you to build that soil health and fertility,” said Bauder, “and then keep it where you want it for years to come.” “Keeping that general picture of soil health in mind—trying to leave more crop residue on the surface, adding a crop to our rotation, integrating livestock—can really help us be resilient in years like this when we’re having some really tough decisions to make about fertilizer,” she added.

WHEN WILL FERTILIZER PRICES RETURN TO NORMAL?

The high cost of fertilizer seems to be here for the foreseeable future. That’s why it’s more important than ever to make sure you aren’t overmanaging your acres with unnecessary applications and looking at management strategies to build more fertile soil. If you have questions about these principles on your operation, it’s a great idea to reach out to SDSU Extension or consult with a trusted agronomist.